The Income Tax Appellate Tribunal (ITAT), Chennai has held that the transfer of registration in the name of the assessee is not a necessary condition for allowing the claim of depreciation under section 32 of the Income Tax Act, 1961.
The assessee purchased a lorry for a sum of Rs. 13,85,000/-. Even before the transfer is effected in the registration certificate, the assessee used the vehicle as its own. The Assessing Officer rejected the claim for depreciation on the ground that there was no addition to the capital asset.
Assessee relied on the decision of the Kerala High Court in CIT v. Nidish Transport Corporation and contended that the transfer of registration is not necessary for the transfer of ownership of motor vehicle. According to them, the transfer takes effect when the motor vehicle was handed over to the assessee. Even before the transfer is effected in the registration certificate, the assessee used the vehicle as its own.
The Tribunal noted that the assessee has produced a copy of sale receipt said to be issued by the lorry owners, a copy of which is available at page 12 of the paper-book.
“It is not known whether the copy of sale receipt was available before the Assessing Officer and the CIT(Appeals). As rightly submitted by the Ld.counsel for the assessee, transfer of registration in the name of the assessee may not be required for the purpose of the claim of depreciation. What is required is delivery of the motor vehicle to the assessee,” the Tribunal said.
Relying on the Kerala High Court decision, the Tribunal said that the Assessing Officer has to verify the sale receipt, copy of which is available at page 12 of the paper-book and thereafter decide the issue afresh in the light of the judgment of Kerala High Court in Nidish Transport Corporation.
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